HEADQUARTERS BRIEFING BY UNDER-SECRETARY-GENERAL FOR MANAGEMENT

HEADQUARTERS BRIEFING BY UNDER-SECRETARY-GENERAL FOR MANAGEMENT

The United Nations received United States payments totalling $625 million last Friday, Under-Secretary-General for Management, Joseph E. Connor said at a Headquarters press briefing early this afternoon.  Mr. Connor was briefing correspondents on both the Organization's financial situation as of 30 September and projections up to 31 December. 

Updating what Fred Eckhard, Spokesman for the Secretary-General had said earlier in his briefing today, Mr. Connor said that "while we did receive $31 million from the United States last Friday, in total, we also received a stack of cheques adding up to $625 million, which included the $31 million”.  Ted Turner had made the latter possible, he added.

Mr. Connor said his presentation today also included projected payments by the United States on the basis of representation by that Member State that its domestic legislation for funding such payments had been more or less finalized.  Payment of sizeable amounts to the United Nations was therefore at hand, he stated.

"We have also been informed by the United States of the components of the amounts to be paid by 31 December", Mr. Connor said.  Those included:  $582 million for peacekeeping arrears –- the second tranche of the make-up payment; $572 million for additional payments of the current year's peacekeeping assessments which was received last Friday; and $23 million as an additional payment for the International Criminal Tribunals -– which was also received on Friday.  The United States also expressed its intention to pay in full the amount of the 2001 regular budget assessment -- $267 million –- of which $251 million was left to be paid.   

"We expect payments in 2001 by the United States to aggregate $1.666 billion", said Mr. Connor. Most of that amount would be received in the October to December quarter. He also expected payments from other Member States in 2001 to aggregate $3.05 billion.  Most of that amount had already been received by 30 September.

Mr. Connor said that taken together, payments and projected payments by all Member States should aggregate 111 per cent of total assessments anticipated for the year 2001, namely $4.246 billion.  Payments by the United States would aggregate $1.666 billion, while payments by other Member States would aggregate $3.050 billion.  He stated that when the ratio exceeded 100 per cent the United Nations had funds in excess of current requirements.  "This restores our financial flexibility and can be used in a variety of ways such as debt paydown", he said.  

The current report on the financial situation of the United Nations was good news.  "We expect Members States in 2001 to contribute more to the Organization through assessment payments than in any prior year, with an aggregate of $4.716 billion already paid or projected to be paid this year", he said.  That aggregate was far in excess of the amounts paid in 2000 -- $2.893

billion.  Both actual payments made up to 30 September 2001 and projected amounts to be paid in the three months after that date were included in the aggregate amount expected from both the United States and certain other Member States.  The projected amounts were based on current information received from the United States and several other States, as well as the Secretariat's analysis of prior payment practices.

"I think it's good to step back and take a look at where we've been and where we're headed", continued the Under-Secretary-General.  Aggregate assessment levels projected through the year 2001 stood at $4.246 billion.  It was a major increase over the year 2000, was twice the size of 1999, and was very close to the previous highs of 1994 and 1995.  All the increases for this year related to peacekeeping, he noted.

Turning to the level of unpaid assessments, Mr. Connor said that at the end of September, those assessments aggregated $3.893 billion.  A year earlier the amount had been $3.094 billion.  All three budgetary areas –- regular, peacekeeping and tribunals –- showed increases in amounts unpaid compared to 2000.  The regular budget increased modestly to $541 million from $533 million.  Unpaid peacekeeping assessments, however, moved to an unprecedented high level -- $3.281 billion from $2.507 billion, while unpaid Tribunal assessments increased from $54 million to $71 million. 

Mr. Connor said that the issue of unpaid assessment balances at the end of September was not the end of the story.  The balance of unpaid assessments at 30 September 2001 -- $3.893 billion -- would significantly change based on projected payments to be made at year-end by other Member States.  By 31 December, aggregate unpaid assessments were projected to fall to $1.799 billion, which would be a marked improvement.

The Under-Secretary-General said combined year-end cash was projected to be at $1.264 billion at 31 December, and consisting of $1.238 billion in peacekeeping; $24 million in Tribunal cash; and $2 million in regular budget cash.  "So it’s a balanced picture –- not good in all respects but better than earlier years", he said.  "At least I can call it a step in the right direction".  It was still, however, tenuous for an Organization that had no reserves, capital or borrowing capacity.

According to Mr. Connor, the issue of amounts owed for troops and equipment was a key one.  He had provided some former exercises in that regard –- a projection at the beginning of the year.  That earlier information was reproduced in this presentation for comparative purposes, along with a revised projection which encompassed the United States arrears payment.

Mr. Connor went on to say that at the beginning of this year debt to Member States stood at $917 million -- $164 million owed for troops and $753 million for contingent-owned equipment (COE).  Regarding current payments made applicable to prior year obligations, he said, "we had expected to pay $100 million to Member States for last year's obligations –- we did better and paid $131 million".

According to Mr. Connor, new obligations, for 2001 were forecast to be higher than originally anticipated.  There were three reasons for that increase.  First, several missions, namely the United Nations Mission in Sierra Leone (UNAMSIL), the United Nations Mission in Ethiopia and Eritrea (UNMEE) and the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC) had larger COE components than most other missions.  Second, the General Assembly recently approved higher rates of reimbursement for troops and equipment.  Third, the Department of Peacekeeping Operations had also revised estimates on amounts due.  "So our original forecast for new 2001 obligations has grown from $504 to $668 million", he said.

The Under-Secretary-General said that applicable to new obligations, current payments had only been $54 million so far and that had been made in June.  "Unfortunately we were short of cash in those months and we had to forgo making payments that we had hoped to be able to make at that time".  Now, however, based on current available cash, a second COE progress payment amounting to $16 million was paid in the first week of October.  It was also projected that payments would be made in November and December for both troop and COE in the amount of $380 million plus total reimbursement payments for new 2001 obligations, aggregated at $450 million.  "We know we can pay it because we got the money on Friday", he said.

Concerning the arrears payment situation, Mr. Connor said $505 million would be paid out immediately to 48 Member States against their claims for 14 missions, as soon as the United States money came in for the first week in November.  The remaining $77 million would be kept separate pending further processing and certification of related contributor claims.  That should not take long.

"I count on the assistance of Member States and their cooperation to sign the required memorandums of understanding (MOUs) as soon as possible", continued Mr. Connor.  That would speed up the processing and certification related to arrears claims and enable the Secretariat to disburse the remaining $77 million as soon as possible.  "What I am saying here", he said, "is that we have the cash –- we are waiting for the bookkeeping to catch up".  That was an incentive for the Department of Peacekeeping Operations as well as the financing section of his own office.

Mr. Connor went on to say that it was hoped to make a further statement to Member States in 2002 for $166 million in connection with the remaining obligations undertaken in 2001.  If that latter amount is paid "we forecast that debt will be reduced by 71 per cent a year earlier".  The original forecast for debt was $904 million –- the new forecast was only $256 million.  That was an enormous turnaround.

Based on the above plan of action, continued Mr. Connor, with the exception of some $37 million for certified claims for the United Nations Transitional Administration in Cambodia (UNTAC), the United Nations Mission in Mozambique (UNAMOZ) and the United Nations Mission in the Central African Republic (MINURCA), the Secretariat would be current in terms of paying troop-contributing countries (TCCs) by the end of the year.  Those were words he had waited a long time to say out loud.

The Under-Secretary-General said unpaid assessments were down; cash was up; debt to Member States had been drastically reduced; and financial stability and security were close at hand -- which "frankly we may need now more than ever before".

When asked about the $500 million-odd owed to the United Nations that was being contested by the United States, Mr. Connor said that when the United States paid all of its amounts that he had mentioned, and he had been assured that they would, that would leave on the books about $550-600 million unpaid.  There were no negotiations that he was aware of that touched on that subject.  "I think it is an issue of let’s get the cash in the door and then we'll see what happens next".

A correspondent wanted to know whether the $582 million for peacekeeping arrears would be divided equally among the 48 Member States, and if not how it would be divided.  Mr. Connor said that money would not be divided equally among the 48 States.  "We have a formula; first of all the payer has to tell us what mission is being paid for and there are 14 of them".  That was the first step –- those who had brought troops and equipment to those 14 missions would be paid.  That would be done on a pro rata basis.  There were bigger and smaller components of the contribution by the various Member States and the payments would be in proportion to those contributions.

A correspondent asked the Under-Secretary-General what he meant when he said that "financial security is close at hand and frankly we may need it more than ever before".  Mr. Connor said he assumed that peacekeeping was on the increase.  "We do not know exactly what responsibilities we are going to be asked to undertake.  You always need cash in a start-up mode.  What I am saying now is that the Organization is ready and so is our cash position."

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